The Samsung Galaxy
Note 10.1, one of the products at the centre of the company's patent
dispute with Apple. Photograph: Lucas Jackson/Reuters

Samsung abused its "monopoly power" over certain wireless patents and demanded an unreasonable royalty from Apple for their use in the iPhone,
hurting the device's commercial prospects, Apple experts testified on
Friday as the two sides presented their last pieces of evidence.
Richard
Donaldson, a former lead patents attorney for Texas Instruments, told
the court on Friday that a 2.4% royalty Samsung wanted on the price of
the iPhone was discriminatory because the patents in question enabled
just a fraction of the smartphone's features.
Later, New York University professor Janusz Ordover likened that rate – equivalent to $14 (£8.90) per $600 iPhone – to a holdup.
Ordover,
a former deputy assistant attorney general for the Justice Department's
antitrust division, said Samsung's conduct distorted the decision
making process in setting standards.
"It enabled Samsung's technology to be introduced, to become part of the standard," he said. "They have acquired holdup power."
Samsung accuses Apple of infringing those patents, which are related to wireless communications for smartphones and are broadly licensed to Intel and other technology corporations.
Apple, meanwhile, accuses Samsung of copying the design and some features of its iPad and iPhone.
The
former Texas Instruments executive joined a string of rebuttal expert
witnesses that Apple presented in court in the closing hours of the US
legal battle with its South Korean rival.
The two sides finally
closed their submissions with Samsung having used all 25 hours it was
allowed for evidence and cross-examination in the trial, and Apple using
all but a minute of its 25 hours.
Closing arguments and jury deliberations, neither of which are time-limited, are set to begin this week.
The
court battle is a facet of a bigger war for supremacy in the mobile
market between the two corporations, which sell more than half the
world's smartphones. The mobile market is one of fastest growing and
most lucrative in the technology sector.
In part, Apple's aim is
to limit Samsung's explosive growth, which it has testified has seen it
lose sales to the South Korean company – because, Apple's witnesses
said, of features copied from the iPhone, though Samsung countered with
Apple data suggesting lack of iPhone availability was a key to lost
sales.
But it is also part of a wider strategic assault on
companies selling phones running Google's Android software, which now
make up well over half of all smartphones shipped worldwide.
If
Apple can prevail over some elements of Android software, it could force
handset makers to change certain features – which might cause a
confusing diversity of features and implementations of some functions in
Android.
Google is not directly involved in the trial, but its executives will be watching the outcome closely.
Donaldson
testified that: "If other companies were to determine that this is a
reasonable royalty, then the total royalty on the iPhone would be
something like 50%. It's neither fair nor reasonable because you could
not be successful in the market."
Other expert witnesses included
Michael Walker, a former senior Vodafone research executive, who from
2008 to 2011 chaired the European telecoms standards authority. He said Samsung failed to disclose in a timely fashion the patents referred to by Donaldson.
During
cross examination, Samsung lawyer Charles Verhoeven probed the idea
that trade secrets and confidential information were exempt from a
requirement for full and timely disclosure.
In any case, the South Korean company had never come under scrutiny from the standards-setting agency on that issue, he said.
The
courtroom battle has transfixed insiders since July. Apple is demanding
more than $2.5bn in damages and a sales ban on certain Samsung
smartphones and tablets, while its rival is demanding licensing fees.
Samsung
also says Apple's damages should be calculated not on gross margins,
but after all other costs – such as marketing – are factored in.
The
trial in San Jose, in the heart of Silicon Valley in California, has
offered glimpses into the two huge corporate machines – from their
design and marketing processes to the profits they make on devices.
Tensions have run high with so much at stake, but the trial has offered some levity.
Judge
Lucy Koh asked whether Apple lawyer Bill Lee was smoking crack after he
presented a 75-page list of witnesses with only minutes left on Apple's
"clock" – a quip that came up again to much good-natured chuckling,
including from Lee himself, on Friday.
Friday's testimony centred
on the concept of standards or essential patents – intellectual property
built into a commonly agreed set of specifications – and in this case,
the UMTS wireless communications standard used worldwide by mobile
devices.
Professor Ordover testified that standards essential
patents (SEPs) – a point of contention in a global market where
corporations constantly seek an edge – had enormous benefits to
consumers and manufacturers.
But they also had potential risk and
could be abused. Ordover argued that Samsung unfairly wielded its two
patents against Apple.
Such patents are meant to be licensed to
all comers on a fair, reasonable and non-discriminatory basis, in return
for being agreed to be essential to a standard.
Apple's lawyers
argue that Samsung – a member of the body that crafted UMTS standards in
2005 – is charging an unfairly high licensing fee for those patents, in
effect trying to stymie market advances.
Samsung says the patents are intellectual property for which it rightly requires compensation.
As
the clock ran down on Samsung's lawyers on Friday, they did not
cross-examine many of the Apple witnesses at any length, and in many
cases simply chose not to do so.
Apple concluded its rebuttal case to Samsung, which had presented its evidence during the week, with just one minute remaining.